SSR 64-61c: SECTION 210(j)(2). -- EMPLOYER-EMPLOYEE RELATIONSHIP --
PERFORMANCE OF HOUSEHOLD TASKS AND GENERAL MAINTENANCE WORK ON FAMILY
PREMISES BY MEMBER OF FAMILY

Where plaintiff, who was supported by and lived in the home of his
son-in-law, had been performing various odd jobs around the home for a
number of years without receiving any cash remuneration; where for a
period of 12 quarters during which he rendered the same services the
son-in-law paid the plaintiff $5 a week and after such period stopped
payments in the belief that plaintiff had earned sufficient quarters of
coverage to qualify for social security benefits; where after such
payments stopped plaintiff nevertheless continued to perform the same
services; where the son-in-law did not deduct FICA tax and did not report
the alleged wages until after the plaintiff had filed an application for
social security benefits; and where the son-in-law listed the plaintiff as
his dependent on his income tax returns; held, there was
substantial evidence to support the Secretary's decision that no genuine
employer-employee relationship existed and that the payments to the
plaintiff did not constitute wages within the meaning of the Social
Security Act.

WEICK, Circuit Judge:

This appeal is from an order of the District Court setting aside a
decision of the Secretary of Health, Education and Welfare denying old-age
insurance benefits, under the Social Security Act, to appellee Domanski
and directing the Secretary to allow and pay his claim.

The Secretary had denied the claim on the ground that no genuine
employer-employee relationship existed between Domanski and his
son-in-law, who was his alleged employer.

Upon denial of his claim, Domanski filed an action in the District Court
to review the decision of the Secretary. Motions for summary judgment were
filed by both parties. The District Court adopted findings of fact and
conclusions of law and granted Domanski's motion for summary judgment. The
District Court ruled as a matter of law, on the facts found by the
Secretary, that Domanski was an employee of his son-in-law during the
period involved and ordered that he be paid social security benefits. The
Secretary filed his appeal.

The basic facts were not in dispute.

Domanski, a native of Germany, came to the United States in 1949 with his
wife, his daughter, and his son-in-law, William M. Gougeon. Gougeon met
and married Domanski's daughter while Gougeon was on duty in Germany as an
American soldier. Domanski had, for a while, been a shoemaker in Germany,
but for most of his adult life was a postal employee there. He was in his
late fifties when he came here in 1949, and became 65 years old on April
14, 1957.

Gougeon and his wife provided a home for and supported the senior
Domanskis after their arrival here. In 1950, the Gougeons and the
Domanskis moved to Onaway in Michigan's upper peninsula. Gougeon acquired
some land on the shores of Black Lake and originally planned to construct
and operate a resort camp there. The commercial plan was not carried out.
Through the years 1950 to 1954, the land owned by Gougeon was, by the
efforts of Gougeon, Domanski and some contracted help, cleared and a house
and cabin built thereon. Until the cabin was built, the Domanskis shared
the house with the Gougeons. Thereafter, they lived in the cabin. Domanski
performed needed chores in and about the Gougeon premises. In his
statement to the agency, he stated that he "helped with clearing and
filling the land, construction, painting, shingling, building fences,
etc." There was evidence of other work done by Domanski -- cutting logs
for and aiding in the construction and maintenance of a breakwater,
wheeling with a wheelbarrow many truck loads of sand for a road, and like
work.

Gougeon, the son-in-law and alleged employer, was himself employed as a
representative of an insurance company. He worked along with his
father-in-law in the general maintenance of his property. In 1956, the
increase in his insurance work prevented his giving as much time to his
property as he had, up to that time, been accustomed to give. More work
then fell to the father-in-law, Domanski. Domanski and Gougeon both
testified that at this time in 1956, Domanski felt that he should have
some money in addition to his keep and it was agreed that thereafter he
should be paid $5.00 per week. Until July 1, 1959, he received these cash
payments. At that time, the involved application for old-age benefits was
made. The payments were then stopped, as it was assumed that he would
begin receiving the payments for twelve quarters, the minimum number
required to make him eligible for such social security benefits.

At no time prior to the application for social security benefits were any
deductions for social security tax taken from the money paid to Domanski.
Likewise, neither Domanski nor Gougeon applied for a social security
account number. Domanski and wife were both claimed as dependents by
Gougeon for income tax purposes.

Domanski, during the period from 1955 through 1959, had a small income of
less than $400 from other sources such as shoe repairing and odd jobs. The
alleged payments for wages made by Gougeon to Domanski during the twelve
quarter period amounted only to $780.00.

Domanski's duties after July 1959 when the $5.00 payment for weekly wages
ceased were no different than they were during the twelve quarter coverage
period. Gougeon continued after July 1, 1959 to furnish food, free rent
and utilities to Domanski and his wife as he had during the coverage
period and prior thereto since 1949. Domanski took care of his spending
money from his small income for shoe repairing and odd jobs.

At the hearing Domanski testified in part as follows:

Q.

In 1956 did you start to get money?

A.

I told Mr. Gougeon I have no money.

Q.

You said you wanted a little money?

A.

Yes.

Q.

And what did he say, okay? He said okay? Your son-in-law say 'All right I
give you money?'

A.

Yeah, he said he would give me few dollars.

Q.

How much did he start giving you?

A.

Five dollars a week at no regular day.

Q.

For the same work?

A.

Yes.

Q.

Exactly five dollars, you got five dollars exactly?

A.

Yes. . . ."

Q.

Who brought up the question of you getting the $5 a week, or extra money,
you or your son-in-law?

A.

I tell him I need little bit money. I do too much work. I tell him, I need
a little bit money. I needed a little money for shaving and what not. . .
."

The District Judge in his findings of fact quoted in part from the
findings of the Secretary as follows:

'By 1955 the claimant's son-in-law found that his insurance work had
increased and had become more competitive, and he was thus required to put
more time in his usual calling. Accordingly, he was unable to perform as
many services about the house as he did previously and the claimant
assumed more duties. At his [plaintiff's] request, he was paid $5.00 each
Saturday for these services. There were no deductions for Social Security
or income tax in connection with these payments.'

'. . . The weekly payments were discontinued in July 1959 when it was
thought that claimant was eligible for Social Security benefits; but the
son-in-law continued to support the claimant and his wife. If the claimant
did not perform the chores about the home, it would have been necessary to
hire another for this purpose. The son-in-law also considered the claimant
as his employee.'

In addition to the findings quoted by the District Judge, the Hearing
Examiner also found:

'In late 1955 the claimant (Domanski) asked his son-in-law for some
payments in addition to the room and board, to have some spending
money, and the son-in-law agreed to pay him $5.00 per week. This
situation continued from 1956 into 1959 when the payments were stopped on
the theory that the claimant was then eligible for social security
benefits.' (Italics ours.)

The District Judge in his findings of fact also quoted the following from
the findings of the Hearing Examiner:

'From the facts in this case it does not appear that a genuine
employer-employee relationship existed between the claimant and his
son-in-law. . . . There is nothing in the record to establish that an
employment relationship was contemplated between the parties; that the
claimant expected to receive compensation for his efforts; that the
son-in-law expected to pay wages in this connection.'

We should first point out that in an action to review the decision of the
Secretary the case is not tried de novo in the District Court. The review
is limited to the record of the proceedings before the Secretary. In
reviewing this record the Court is not authorized to adopt findings of
fact of his own, but must accept the Secretary's findings of fact if they
are supported by substantial evidence. When so supported, they are
conclusive. 42 U.S.C. § 405; Hobby v. Hodges, 215 F.2d 754 (C.A.
10). The finality of the Secretary's findings extends also to inferences
drawn by him from the evidence. Walker v. Altmeyer, 137 F.2d 531
(C.A. 2); Sherrick v. Ribicoff, 300 F.2d 494 (C.A. 7).

Whether Domanski was an "employee" receiving "wages" for the requisite
period was not, in our judgment, a question of law, but of fact to be
determined from all the evidence in the case. Irvin v. Hobby, 131
F.Supp. 851, 863.

The Hearing Examiner found from the evidence that "no genuine
employer-employee relationship existed between claimant and his
son-in-law." We think there was ample basis in the record to support this
finding of fact. This may be gleaned from the family relationship between
the parties; from the fact that Domanski and his wife were members of the
household of the son-in-law receiving free board and lodging from 1949 to
1956; from the nature of the service rendered; from the fact that the
payments were not wages but an allowance in cash for spending money; from
the fact that the payments were made only during the twelve quarter
qualifying period and ceased upon its expiration although presumably
Domanski continued to render his alleged services for nothing; from the
fact that the son-in-law took his father-in-law and mother-in-law as
dependents on his income tax returns; from the fact that no social
security return was made and the alleged wages were not reported until
after Domanski made his claim for benefits.

The District Court could reach the conclusion which he did only by giving
no effect to the inferences drawn by the Secretary from the evidence, but
as we have shown, the Court is bound by such inferences. The District
Court was also bound by the finding of the ultimate fact that no genuine
employer-employee relationship existed as this was, in our opinion,
supported by substantial evidence.

This case is similar to Folsom v. O'Neal, 250 F.2d 946 (C.A. 10)
which reversed the judgment of the District Court overturning the decision
of the Secretary involving an alleged employment of a brother by his
sister. In that case the brother was paid $300 a month for duties
performed at the sister's hotel. See also: Stevenson v. Ribicoff,
297 F.2d 811 (C.A. 2).

The judgment of the District Court is reversed and the cause is remanded
with instructions to dismiss the complaint.

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